What is a Ship Registry?
Flag states establish a registry to administer the registration process.
A national or closed registry is open only to ships of its own nation. This traditional format will typically require a ship be owned and constructed by national interests, and at least be partially crewed by its citizens.
National registries have a better safety and operation record as implementation of international conventions and codes is stricter. This makes it easier for a ship owner to arrange finance from international banks on favorable terms as the perceived risk is lower.
An open registry allows registration of its own as well as foreign-owned ships. Ship owners primarily opt for these registries due to:
- Lower registration and administration costs
- Less stringent requirements for acceptance and continuance
- Choice to recruit cheaper crew from an international labor pool.
However, some open registries are now popularly called as Flags of Convenience (FOC). They legally allow the owners to remain anonymous and often allow electronic ship registration without adequate checks. This makes it difficult to prosecute the owners in case of maritime violations or disputes. The International Transport Workers’ Federation, maintains a list of registries regarded as Flags of Convenience.
If as a ship master, you are in charge of a ship registered with a FOC, you have to be more proactive in your upkeep. As FOCs allow sub standard tonnage, ships flying these flags are on the watch list of all port state control administrations.
Registries may be governmental or private agencies. For example, the United States Coast Guard has an Alternative Compliance Program, where the registry can assign a third party such as Class to administer inspections on its behalf.
FOCs also provide parallel or dual registry, if the primary registration allows it. In a typical scenario, a charterer takes over the ship on bareboat charter. Now, the charterer is responsible for operation, maintenance and crewing of the vessel. The charterer selects a second registry where he can maximize profits by lowering maintenance, operation and crewing costs. At times, a charterer may opt for a second registry to earn higher revenue by catering to a restricted market.